Over the past few years, the real estate market has predominantly favored sellers, with homes selling quickly and for top dollar. However, as the number of homes on the market grows, the dynamic is shifting toward a more balanced market. In such an environment, sellers may need to be more flexible to attract buyers and close the deal. One effective strategy that can help sellers get their house sold is offering seller concessions.
What Are Seller Concessions?
Seller concessions are costs associated with the homebuying process that the seller agrees to cover, making the deal more attractive to the buyer. According to the National Association of Realtors (NAR), nearly 24% of sellers offered some form of concession in 2024. Offering concessions can help ease buyer concerns, especially when it comes to financing or additional costs, and may be the key to closing a deal.
Here are some common types of seller concessions:
- Covering Closing Costs: This means the seller pays a portion or all of the buyer’s closing costs, which may include fees for appraisal, title insurance, and loan processing.
- Price Adjustments: Instead of handling repairs or upgrades directly, sellers may reduce the home’s price to reflect the cost of the repairs or updates the buyer will need to make.
- Home Warranty: A seller might offer a home warranty for the first year of ownership. This provides the buyer peace of mind that certain repairs or replacements will be covered.
It’s important to note that these concessions come out of the seller’s profits at closing, and don’t require additional funds to be put forth upfront. Not all concessions are monetary either – sellers may offer personal property like leaving behind lawn equipment if the buyer is new to owning a home with a yard, for example.
How Seller Concessions Help Sellers
Offering concessions can be a strategic way to move a sale forward. In a more balanced market, pricing your home realistically and offering a concession may be key to attracting buyers and closing the deal. As Dennis Shirshikov, a finance and economics professor at CUNY/Queens College, pointed out, “Pricing homes realistically and being willing to offer concessions… will be key to closing deals in a less frenzied market.”
For instance, let’s say you’ve accepted an offer, but after the home inspection, the buyer asks for repairs. Instead of restarting the process by looking for a new buyer, you can offer a concession. Here are some ways to go about it:
- Take on the repairs yourself and handle the costs.
- Reduce the home’s price to cover the repair costs, allowing the buyer to handle them after closing.
- Offer to pay a portion of the buyer’s closing costs and let them use the savings for repairs.
Concessions can bridge the gap between your goals and the buyer’s needs, making the process smoother for everyone involved.
The Importance of Having an Agent
Negotiating concessions is a delicate process. You don’t want to offer too much, but you also want to ensure your home sells. A skilled real estate agent can help you decide when and how to offer concessions, ensuring that you maintain a favorable outcome while making your house more appealing to buyers.
A good agent will:
- Advise on the best type of concession for your property and the current market conditions.
- Help balance the potential cost of the concession against the sale price and market trends.
- Guide you through the negotiation process, so you don’t feel pressured to give away too much.
Bottom Line
As the market shifts to a more balanced state, seller concessions have become an important tool in helping sellers get their homes sold. When used correctly, concessions can address buyer concerns, make your home more attractive, and get you closer to closing the deal.
If you’re considering selling your home, it’s essential to have an experienced agent by your side to guide you through the process. From pricing your home correctly to negotiating concessions, an agent will help you achieve the best possible outcome. Ready to sell your home? Let’s connect and discuss how seller concessions can work for you!
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